Category Archives: Pragmatic Marketing

66% of marketers investing in Social Media

66% of marketers plan to invest in social media over the next 12 months.  This is from a study by Alterian.    20% of traditional marketing budgets are being funneled into social media by 40% of the marketers questioned in the study.

When we think of making money with technology our minds may drift to software, but in the very rapidly changing world we inhabit,  Web 2.0, aka “social media” like Facebook, Twitter and even YouTube is becoming a key place to not only find our customers and target them with enhanced customer service or cross-selling (offering them a product or service that compliments what they already buy from you), it is simply the fastest growing way to reach new prospects and stay in touch with your current customers.


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Making Money with Facebook?

Social media (the latest “techno-buzz term”) simply refers to people having conversations online.  In the far away land known as “Web 1.0” the internet was one-way.   You threw a website online or sent out emails and things were pretty simple.  Customers would check out your website for information, and might call your contact center or send you an email.  Ah, the good old days!

Social media (Facebook, Twitter. . .even YouTube) makes this seem quaint and old fashioned.  In the world of Facebook a short comment is followed by other comments and pretty soon you have a town meeting going on.    The vendor does not control the conversation — in fact no one controls it, not even the person who begins it!     With 500 million users now on Facebook it is larger than the United States of America — and perhaps just as powerful in its own way.

This new phenomena of social media can be a power for good or for evil.    It can help your business, or it can destroy you.   Businesses today must learn to deal with it one way or the other — and to try to find a way to use it as a way to make money.

The first thing to realize is that if you take a used car sales approach to Facebook or its ilk you will fail miserably.  Social media is all about the conversation and nothing turns people off faster than a sales pitch in the middle of a party.     To get fans who “like” you and read what you post you must provide valuable information, hopefully in an interesting way!  Doing this must be consistent — you may well have to hire an employee to manage your social media presence.   My company provides training, consulting and even provides the social media “presence” for companies — but be forewarned that if you outsource to someone like me they still need to learn a lot about your company and stay in close contact with you.    Why?

Because it is all about the conversation — and if there is no meat, no “there” there, you will quickly turn off anyone interested in you — and far from making money, you will soon start losing it to your competitors.

Content is king.  To make money on Facebook, Twitter and the rest you must have content of value and you must provide this in a succinct fashion.  You must post often (2-3 times a day on Twitter, at least daily on Facebook and 3-4 times a week on your corporate blog).   Since this is a conversation, you must encourage “fans” (find them via your email databases and by posting in places your customers visit online).    Respond to comments, good and bad — and do not be defensive.

Remember it is a CONVERSATION.

Some of the keys to success in Social Media are:

  1. Build a large and legitimate following by being informative and interesting;
  2. Respond to comments quickly and with substance
  3. Blog, Tweet and post frequently — but again it must be USEFUL information
  4. Monitor your social media communities — know what is working and what is not working

There are some great tools to help you manage multiple social media efforts, and to analyze how successful they are.  You will most likely not see “over night” results, but over time your base and your sales will increase.

As social media grows (and the largest growth is in women 55-65!), the traditional marketing bases of newspapers, radio and television are losing customers and advertisers.    Social media is a revolution.  There are ways to thrive in the revolution, but it is not by playing the game the way you might have historically with press releases, TV ads and the like.   The new world is all about loss of control and “the conversation.”

CRM Shortcuts – Faster Ways to Customer Relationship Management

Years ago, I ran product management for several  industry specific CRM data warehouses (in other words, business intelligence) for Teradata .  My team worked with large Teradata customers including Wal-Mart, Bell South (now AT&T), Delta and Continental Airlines and other household names who were using Teradata to locate all their customer data and compile it in a system capable of analyzing customer buying trends.  The goal was to increase cross selling and up-selling to existing customers as well as to retain them (at least the profitable ones!).  Data mining (“what if I did X instead of Y”) type analysis could help target new customers as well.

It was interesting, and profitable.  The customers targeted in different market segments (like Retail, Banking, Telecom, Travel, Hospitality and Healthcare) saved money because they did not have to “tweak” generic systems to their industry variances.  It was profitable for Teradata, because a good chunk of development could be spread over multiple customers instead of starting from “scratch” each time.

No CRM solution can be 100% “off the shelf” — even for small businesses.   There are certain things that are unique to the way a company does business.   Yet, the more that can be “out of the box” and functional, the faster the rewards and the easier to get it up and running.

The reason I’m traveling down memory lane is because last week I received an email from Lauren Carlson, a CRM Market Analyst.  She wondered if I’d be interested in blogging on the topic of industry specific CRM applications built around Microsoft Dynamics CRM.

If you’ve read my blog for awhile you may know I am a big fan of Dynamics CRM.   My curiosity was raised so I check out her blog, “Microsoft Dynamics CRM Industry Solutions:  Our 15 Favorites.”  Since there are over 750 industry solutions built around Dynamics CRM this was quite an undertaking!

For easy navigation, the article links each industry to its corresponding solution:

Advertising
Financial Services Non-Profit
Agriculture Healthcare Pharmaceuticals
Automotive Hospitality/Travel Public Sector
Construction Insurance Real Estate
Distribution Legal Retail

If you take a look at any of these solutions for your industry segment heed these warnings:  check out the vendor’s track record for keeping up to date with Dynamics CRM.   Any time you have a third party “adding value” to another vendor’s product they can begin to slip behind in updates.  Suddenly your third party application may not work with newer releases.   Also, in your contract with the third party ask what happens if they go out of business.   Any customer / vendor relationship is a bit like a marriage — so go into your relationship with your eyes wide open, and a pre-nup in hand!

It also behooves you to check some happy users who have been with the third party independent software vendor (ISV) for a few years, to make sure the customer support and “bug fixes” are fast and relatively painless.   Keep in mind that you are paying a premium for the value add of the industry specific application (although you may get a discount on the CRM software) — do your due diligence to determine if the value you will get makes the additional cost of the third party application cost effective for your business.

Social CRM is redefining customer relationships

Have you heard the story about “Dell Hell”?  A few years ago a Dell customer was unhappy with a computer he’d purchased.   In the old days he would have groused to some friends and spent countless frustrating hours on the phone to Dell customer service.    Those days (perhaps unlucky for some vendors) are gone.  Now we live in a social media (Facebook, Linked In, blogging, Twitter, etc.) world where we are no longer “six degrees of separation” from one another — but more right around the internet corner.

In this case the unhappy user wrote a blog and in it he wrote:

I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie. I’m having all kinds of trouble with the hardware: overheats, network doesn’t work, maxes out on CPU usage. It’s a lemon.

Jeff Jarvis, the blogger in question, might have been very surprised by the reaction of his blog.  He hit a nerve and within two days his blog was the topic of a New York Times article. This is not the type of public relations any company wants.

In the “old days” of just a few years ago the company drove the message.  Today with social CRM the customer is driving it as well.  If your customers are not happy they are blogging, tweeting and letting the world know of their unhappiness with your products / services.

The future belongs to those who realize that communication with customers is now a ‘two way street.”   Social CRM (customer relationship management) means that the customer can communicate to the world at large without a multi-million dollar ad campaign.   All you need is a keyboard and an internet connection (and the keyboard may be a virtual one on a smart phone).  People “tweet” their unhappiness instantly.

Businesses need to realize that social media can be their friend (as in Gary Vaynerchuk who spent $15,000 on a  direct marketing mailing which won 200 new customers; $7,500 on a billboard ad which brought in 300 new customers; and spent $0 on a  Twitter “tweet” (social media blast of a few sentences at most) and got 1,800 new customers.

The power of Social CRM is that today’s savvy customers trust their friends (and social media is all about connecting with people who share your interests) more than they trust a paid marketing mailing or billboard.   When Vaynerchuk tweets and someone contacts them he makes sure he contacts them back.  It is a two way conversation.  Granted he is a busy guy and the reply may take a long time — but he DOES respond.  Meanwhile others continue the dialog for him, and the “conversation” (social media is all about conversation and not a one way ad) continues, the audience grows and the control of the message may not lie with the business — but if the business is involved it influences and wins the business.

The way we sell and market is changing — and this change is bringing us back to the “one to one” marketing goal of CRM in a way that big business could never do all on its own.

Dell learned a lot from “Dell Hell,” and you can too.  Realize that if you have a great product people will sit up and take notice.  They will also notice if your product is not so good — and they will tell others of their unhappiness.  The customer relationship is now perhaps the customer / vendor relationship and it is definitely a two way street.

Automating Product Management (PLM) — Failure?

Product management is a high wire act that requires two skills that seem opposed to each other.  On the one had a product manager must be artistic and innovative — able to spot trends, articulate the value to the market and envision the marketing plan.  On the other had the role is very focused on the minute — ensuring that engineering is day by day fulfilling the requirements.

From identifying problems to be solved by the new product (or solution), to competitive analysis, to product roadmaps and strategy there are definite touch points in product management that have to follow along a project management type timeline.  Pragmatic Marketing has famously articulated the steps common to the process in their Framework.

The functions of the job are normally tracked with Microsoft Office applications including Project, Excel and even PowerPoint and Word.   This means difficulty in keeping the various sources in sync and reinventing the templates for each new release and offer.   The seeming answer to the problem was a new class of software called PLM (product lifecycle management).  Just as ERP (Enterprise Resource Management) automated the back office functions including finances and CRM (customer relationship management) automate interfacing with customers, PLM seemed like a brilliant solution that was desperately in need.

In a nutshell, PLM helps manage the entire lifecycle of a product or service from idea, through market analysis and need analysis and into design and manufacture, then to service and disposal. PLM connects people responsible in each steps as well as tracking necessary data, processes and business systems.  In other words PLM automates and provides a product information backbone for the product development and delivery process.

By helping to automate, streamline and track the process of product development costs are reduced, time to market shortened and over all over sight and tracking greatly improved.  The cost to implement is paid back quickly (if PLM is implemented properly), so this seems like a holy grail for product management.

So why is IBM abandoning ship?

IBM jus sold its PLM offering to Dassault Systèmes (DS).     Sure, IBM says this is a strategic move and that DS is a partner — but since IBM has been a market leader in PLM does IBM see the handwriting on the wall?  Is PLM an idea that just did not make it?

CIMdata,  a PLM Consulting firm, writes that the PLM market grew 6.7% in 2008.   That was the good news.  CIMdata repoted that in 2009 PLM experienced a  12% decline!  Revenue went from $15.96 billion in 2008, to $14.03 billion in 2009. This decline was larger than originally forecasted.

I’m not heralding the death of PLM.  I’m a big proponent.  It helps to standardize the process across product managers and indeed the entire organization.  It is very cost effective.  Still, is the sale of the IBM offering the canary in the coal mine?  (Miners used to bring canaries into the mine with them and if the bird died they knew the air quality was declining, and left before they died themselves).

CIMdata states that the 2009 information is preliminary and reflects currency exchange rates—primarily the euro versus the dollar rather than a real decline in sales.  CIMdata’s preliminary estimates indicate that investments in all sectors experienced declines in 2009 over 2008.

Is that true or is it trying to cast a good light on a bad revenue stream?  CIMdata report (in their press release):

“Comprehensive cPDm dropped to $2.7 billion, a 10.9% decrease. Investments with cPDm Systems Integrators/VARs/Resellers decreased 10.6% to $3.87 billion. Digital Manufacturing investments declined 12.7% to $445 million. Multi-Discipline MCAD dropped 12.4% to $2.57 billion, while investments in Design-Focused MCAD declined 20% to $1.83 billion. The Simulation and Analysis sector of the Mainstream PLM market experienced a more modest decline of 6.4% to reach $2.13 billion in 2009 while Non-Bundled NC had a 19.1% decline to $475 million. The distribution of these investments as components of the full Mainstream PLM market is illustrated in Figure 1.:

Figure 1—2009 Mainstream PLM Market Sector Distributions (Millions)
(Market information represents CIMdata’s estimates)

“Mr. Amann commented, “While 2009 reflected a downturn in new PLM investments, companies retained maintenance and continued to spend on services in support of PLM activities already underway. Continuation of PLM programs indicates that more companies recognize the value that PLM provides in helping them maintain their competitive position during difficult economic times. Hardest hit were small- to medium-sized businesses who tend to be more subject to credit and cash flow issues. Many small companies had to stop their PLM investments while larger enterprises had the resources to sustain programs that were already underway.”

“Ed Miller, CIMdata President stated, “Even in economic downturns, those companies that sustain investments in PLM can become more efficient both by reducing cost and better leveraging existing resources. Importantly, investing in PLM helps position companies to develop and deliver market-leading products as the global economy improves.””

I hope they are right.  Perhaps this is a blip caused by the economic times, but it is something to be aware of if considering PLM.

CRM and Email Marketing

Since CRM (customer relationship management) is supposed to mean any one or any system that interacts with customers one would logically think that email marketing would be an integral part of any CRM solution.

But it isn’t.

Email marketing has been around as long as email itself has.  Yet most companies who do email marketing for customer retention (up selling and cross selling) or acquisition (acquiring new customers) do so blindly using third party lists or hobbled together lists.   Some may use Templates found on Microsoft’s template section of their website.  Others use a variety of software or internet based solutions — and there same to be a plethora of them out there.

Most companies seem to use the axiom:  throw enough mud on the wall and some of it is bound to stick when sending out corporate marketing emails.

No tracking of the ROI (return on investment).  No knowing if you are “ticking off” your best customers.  No knowing how many hit the SPAM filter.  No knowing how many people get multiple emails from you (annoying them).  Bad email marketing hurts every other aspect of CRM, and does more damage than good.

This is mass emailing.  My friend, Sundeep Kapur (other wise known as the Email Yogi) has been an email marketing guru since around 1999 and he has outlined “Seven Stages of eMarketing” in a  Whitepaper – available, with just a simple request.  The first is exactly what I outlined above:  mass marketing with the hope someone, somewhere will read it.

I don’t want to “give away” everything in Sundeep’s excellent paper, but suffice it to say that email CRM isn’t any different than CRM in general — know thy customer.  You must target your existing customers and potential customers by market segment (customer segmentation), by demographics, by buying history, etc.  None of this is rocket science, but it is all hard work — that results in qualified leads that generate new customers.

The more you can customize the email to the prospect the better.  And if you can make it FUN even better still!

Customer segmentation allows you to target your email messaging.

Once you’ve created an email offer, newsletter, etc. it is a good idea to set up two separate tests with similar, but not identical, offers.  The test audiences must be the same segmentation for this to work.  Try to make an offer that requires a response (buy in) before the scroll down point (above 400 pixels in height) and if this is the first email one of those should be an opt in to get more emails from you.

Design the email using HTML and a plain text file.  If you start getting fancy with CSS or flash — even Java — many email programs won’t read it properly.

When CRM and email marketing work together it is a beautiful thing.    Email marketing can also extend into social networking (Facebook, MySpace, Twitter) via RSS and SMS.

Sundeep works for my old boss, NCR — a leader in retail and hospitality solutions.   Software solutions vary based on your own corporate needs (and budget).  RWD uses Constant Contact.  The design of emails is pretty easy, but it isn’t your standard Windows “look and feel” so there is a learning curve and difficulty if you want to copy or paste from it into another program.   They do offer a free 60 day trial, so if you are new to email marketing take a look at them and try them out.

More mid-range companies might look at Gold Lasso.   The UI is also not the easiest to use, but they do have some analytics thrown into the mix.  Also good in the mid-range and even enterprise (big) company range is ResponsysJupiterResearch awarded Responsys the highest combined score in “market suitability” and “overall business value” among all enterprise-oriented email service providers.  It also ranked high with Forrester and Gartner (in a niche category).  The Enterprise level also includes the market leader, Cheetahmail (now part of Experian).

Cheetahmail is the most entrenched, and it is very feature rich.  The UI (user interface) suffers from some of the same issues as Constant Contact and Gold Lasso.

In a future blog I’d like to delve into how well email marketing soltuions tie into legacy systems (the back end CRM, ERP and industry specific apps which hold the wealth of customer data) — both from a push and pull perspective.

The World is Upside Down

This blog spends a lot of pixels on the topic of CRM (Customer Relationship Management).  How can companies manage their customers.  How can we keep current customers loyal and retain them?  How can we find new customers who will be profitable and love us and stay with us?

Simple answer?

You can’t.

You don’t really manage customers anymore — if you ever did.  Perhaps the idea was always unreasonable.

Customers are people.  Newsflash.

People are unpredictable.  People are not, by nature, loyal.  If they were the divorce rate wouldn’t be at 50%.

People only care about what they care about NOW.  Today.  If you are selling Christmas trees to Jews they won’t care.  They don’t use them (well, some do but not many).

Customers buy what they WANT to buy and the key today is not in trying to manage your customers but in understanding who they are, what they want (or need) and making it easy for them to be in the right place at the right time with the right story.    Story is key here — because customers need to be able to find what they need when they need it.

And it needs to be simple.  Simple for customers to understand what your widget is.  Easy for them to understand why it matters to THEM (not you, they could care less about you) and then make it easy for them to get to the end result of what they want.   Intuitive (like a iPod, like a GUI (graphical user interface) versus a c: prompt).

The customer is now in charge of the world.  Realize it.  Embrace it.  So now more than ever is “know thy customer” and realize that while you need them, they don’t need you.  Unless you give them a reason to need you.

CRM or BPM?

Last week I had the chance to travel to beautiful Cambridge, MA.  Years ago AT&T sent me to MIT for various business courses, but I hadn’t been there in years.  Coming from Orlando with its 100 plus degree days it was a pleasure to walk by the Charles River along with many others.  The weather was perfect and I wasn’t the only one enjoying the gorgeous day.

I was in Cambridge to visit with Pegasystems, the leading BPM (business process management) software leader.  Pega (as they are known) boasts major customers including Bank of America, three or four of the “Blues” (Blue Crosses) and many others.

BPM automates common work practices — and since many companies are like silos — marketing is independent of sales is independent of engineering is independent of shipping, most processes that cross departments (and don’t they all?) get there via email, voice mail, forms, excel spreadsheets. . .  Even when the systems are the same the receiving department has to proactively pull the work into their world.

BPM not only automates processes across organizations, but using quality improvement methods and workflow automation work gets done faster and more efficiently — thus saving time and money.  In the world of government regulation (such as Sarbanes-Oxley aka SOX) where companies had to keep a tighter track of financial information for auditing purpose) being able to not only automate processes, but to track them becomes a necessity.

Pega is #1 in the BPM software world with their  SmartBPM® product.  Their president, Alan Trefler was named “Computer Software Executive  of the Year” at the 2009 American Business Awards.  So in the world of BPM they are not only the market leader, but the thought leader.  Pega is the leader in the Gartner Group “Magic Quadrant” for BPM.

Recently Pega has dipped its toe into the CRM (customer relationship management) world with their solution CPM (Customer Process Manager).  They have build a contact center customer service support module on top of this BPM engine.   While certainly not a “threat” to the more complete CRM vendors who go beyond the customer service space, the Pega solution is the next logical step for CRM.

Today’s CRM solutions are, for the most part, records based.  Whether we’re talking of Siebel (Oracle), Salesforce.com or Microsoft Dynamics CRM they all start by creating a record.

Remember those corporate silos I mentioned a few paragraphs ago?  All that great customer information winds up “usable” beyond the CRM application only if it is in a field in said record.  Otherwise that valuable customer “gold” becomes embedded in notes that a CSR or sales rep makes of the contact, and are only available to those who sit and read those notes.

What Pega’s CRM does well is to integrate end-to-end customer-facing processes across not only departments but existing applications.  If you already have Siebel and an (enterprise resource planning) ERP solution and a (supply chain management) SCM solution you can bring in Pega underneath them to streamline the hand off of a sale or problem resolution across organizations.  Over time you can begin to implement some of their desktop apps that can be very easily modified on the fly.  The power of Pega’s ability to pull this off is shown in their 50% plus growth in the last year.

The most amazing thing about Pega is that they are aimed at the big companies —  1,000 plus users.  Many CRM applications simply can’t scale to large implementations, but Pega can — and it does so based on an open architecture (java).

Pega does have competitors in this new CRM hybrid space.  Chordiant and Sword Ciboodle (a really excellent offer from a Scottish company who is making inroads into the States) to consider along with Pega if the process oriented CRM approach makes sense in your company.

The traditional CRM vendors have noted the interested a hybrid BPM / CRM approach and all have some iteration of it on their product roadmaps.    If you’re interested in the CRM world, take a look at Pega, Chordiant ans Sword Ciboodle to get a feel for your future.

The Irony of it All

My last blog posed the question:  “Is Microsoft the next Dinosaur?”  My point was that most companies have a lifecycle, just like products do and people do.

Microsoft may or may not be at the precipice of a decline — it is really up to Microsoft.  The thing I always admired about Bill Gates in the “early days” (and I was a UNIX fan since I worked for AT&T Computer Systems) was that he was always paranoid.  He knew the internet could eclipse the OS as far as the center of the IT universe and so out came Internet Explorer.  Microsoft tried to win the search engine war — and after repeated lack of success has what looks like a nice product in Bing.

But no sooner did I post my Blog and get lots of comments (most not so nice from Microsoft proponents) along comes PC World with an article that asks the very same question I asked: 

Is Microsoft Following GM’s Road Map?


Analysis: GM’s bankruptcy marks the end of an era. Is Microsoft repeating the automaker’s mistakes?

J. Peter Bruzzese, InfoWorld

// Jun 3, 2009 6:00 pm

“Microsoft has faced a few serious bumps over the last 10 years but came out fine. . .Knowing the work Microsoft developers put into their products, I believe they are the saving grace of the company — as long as they are allowed to hear the voice of the people. This is an area where I’ve seen a problem.”

I worked for AT&T at the hey day of Bell Labs.  We had the brightest, most awesome minds around — just like Microsoft does today.   Microsoft ca be its own best friend or its own worst enemy.  Only time will tell.

Surviving and Thriving: Marketing in a Recession

Every day there seems to be more bad news:  Circuit City is out of business, closing nearly 400 brick and mortar stores.  Home Depot is shutting down its high end Expo chain.  Even Microsoft and Apple are seeing tough times.

But every cloud has a silver lining.  There are ways to market your business successfully in a recession.   The key is “knowing your customer” aka customer business intelligence.  Who is buying?  Why?  What are they buying, and what are the cross-sell and up-sell opportunities there?

Which prospects fit a similar profile (demographics) of your high margin customers?

So identifying the market is (as always) the first step, but in these economic times it is even more critical that usual.  “Know thy customer!”

The next step is knowing what appeals to them and then selling to them in a cost efficient manner that meets their profile and your product line.  This may mean more targeted email campaigns with coupons, or eZines —  lower cost ways to reach your audience than traditional print advertising, or even “Google ads” and other online paid advertising.

You must know your “value proposition” as you go back to your base and target strategic new prospects.  In one sentence (elevator pitch) why do they need you NOW?  Can you save them money?  Can you make them money?  Can you help them sell more to their own customers?

This is a time of opportunity.  Yes, it is scary “out there” — but as competitors fall away or draw back they leave a vacuum which a saavy firm can fill.    Realize that marketing is an investment, not a luxury.   Like any investment you need to have a plan to invest wisely.

Just like the Dot.Bomb bubble burst we’ll survive, and we can thrive.  This too shall pass.

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